REPORT: Morgan Stanley And Citibank Have Put John Paulson On Their 'Watch Lists'

Closely-followed hedge fund manager John Paulson, who famously bet against the subprime housing market, had a disastrous 2011 with some of his funds falling 30 to 50 percent.

This year his Advantage funds are still in the red although those losses are said to be high single digits.

The New York Post reports that the famed hedge fund manager, who has been able to raise tons of capital through bank hedge fund platforms that allow individuals to avoid the $10 million minimum investment for Paulson & Co., might have a problem with that type of investment vehicle.

From the Post: (emphasis ours)

This money could become a problem. Two of these banks — Morgan Stanley and Citibank — have put Paulson on a “watch” list, which means they won’t add any new money for three months. The two have about $500 million invested in Paulson.